The problem we are seeing and/or having is that sellers are either not realistic with the market.  They still think they can get last years prices, or they bought in the last two years and have to get so much or they will lose.  This makes them try to make more, because they have a down into it, have to pay a Realtor, and have to have money to move.  Problem is that no one cares about all that.  The people will only pay market price, at best, and banks will only loan appraisal prices.  This creates a problem for the seller and they may be forced to reduce their price. 

You , as the professional, should know going in, if the price is right or not.  How do you get them realistic either from the get go, or soon after, before it is too late?

1) You need to address the sale price issue in the beginning, at the listing presentation.  You have to at least let them know about it.  Don't think that if you don't say anything that it will never be a problem or that you can talk to them about it later.  When going over your CMA, show what the realities are, not your opinion but the facts.  If you don't do it now, then you are loosing valuable selling time and may loose potential buyers, because they are ready now and don't want to wait for you to get them to lower the price.  This could cost you allot of time, effort and money because you are spending more then you should because it is harder to work on an over priced house and have to have constant conversations about why it isn't selling.

2)  In the beginning, if you can't get them to set the price right, have them agree to a set date and amount to reduce the price.  When this is agreed to, take action and lock it in, so that you will avoid have to re-discuss the reduction.  It should be automatic.  It is a great idea to have them sign a post dated agreement to adjust the price after....(ex. 30 days by 10000)  If they are not willing to do that, you have , at least, paved the way to the reduction.

3)  Start compiling pricing info from actives, expireds, pendings, and solds from day 1.  Also, get feedback from other Realtors who show the home.  Continue to do this and talk to them weekly about what is going on in the market.  Be honest with them.  This way, when you come back at the end of 30 days, they will not be surprised by what you are telling them, and should be more receptive to the reduction.  Also, when talking to other agents, get the feedback from them about what their clients are saying, ex. pricing, repairs, condition, what they liked and didn't like.  This is great info to pass on to your clients.  This may help to bring them to reality quicker. 

4)  After a couple of weeks has passed it is time to go back and talk to the seller to get the price reduction.  It usually takes a couple of weeks to get them to take action and get the signatures needed and recorded on the MLS.  The longer you wait the more time you will loose. 

5)  It is best to have this meeting in person in your office.  It is harder for them just to blow you off, as opposed to trying to get them to agree over phone.  It is also, a great idea to bring any documentation to .  support your argument.  You do want to make sure you do this on your own turf .  You can also, take them on a tour of the other houses that are their direct competition.  When you call the client to set the meeting tell them you need to met them at your office to discuss some strategies to increase the exposure of their home.  Give them a choice of one day or another, only.  Don't allow them to set the day, you give them the choices of day and time.  You are the professional and the one who needs to be in control.  If you lower the price to be more competitive with other homes, you will get more exposure and even get some to revisit the home that liked it, but thought it was overpriced.  You will be exposed to a much larger group then before. 

Good luck!